Shopify’s CEO, Toby Lutke, has identified the ‘biggest mistake’ most companies make after acquiring a startup and hiring its founders. In a recent interview, the chief executive of the Canadian e-commerce company, which is also the country’s most valuable public company, claimed that companies often make a major mistake by undervaluing founders’ experience and leadership after hiring them.On a recent episode of the “Founder’s Podcast”, Lutke said that companies often fail to recognise the potential of employees with entrepreneurship experience. Instead of using their unique skills, companies isolate these founders by putting them on the “outskirts” and assigning them to the “skunk work team”.Commenting on the unique approach founders have, he said, “I feel like it’s a very special thing. And companies reject it. Companies cocoon them”. Lutke, who co-founded the Canadian e-company firm in 2006, criticised this practice as “daycare for people who tell you that your sh*t doesn’t smell right. And your sh*t does smell.” “I’m like, ‘No, you don’t get to put them in like founder day care.'” Lutke noted.
How Shopify CEO Toby Lutke takes a similar approach for his own company
Lutke revealed that a similar thing happened at his company during the COVID-19 pandemic. Once he noticed it, he made the founders of the companies Shopify acquired more visible, even placing them above other managers. Lutke added that he has a Slack channel with the founders of Shopify’s acquisitions team, where he asks for help.Shopify’s recent acquisitions include logistics company Deliverr in 2022, influencer marketing startup Dovetale in 2022, and workplace messaging platform Threads (not the Meta one) in 2024.The founders of Dovetale and Threads still work in product roles at Shopify, while the CEO of Deliverr left after a year at Shopify to start another logistics startup.On the podcast, Lutke even disclosed that he can easily identify employees who will adapt quickly and perform well during a crisis. He said that he asks interview candidates, “Have you started a company before?”
